Do Workers with Low Lifetime Earnings Really Have Low Earnings Every Year? Implications for Social Security Reform

Levy Economics Institute Working Paper No. 389

Posted: 13 Oct 2003

See all articles by Thomas L. Hungerford

Thomas L. Hungerford

National Academy of Social Insurance (NASI); Independent

Date Written: September 2003

Abstract

When it comes to retirement income policy, there is a general perception that workers have full 40-year working careers before retiring. Further, it is generally assumed that workers with low lifetime earnings have low earnings in each year during a normal working career. The basic research question is why do some workers have low lifetime earnings? Is it due to low earnings in every year, or is it due to some years of no earnings combined with years of relatively modest earnings? The key findings from this paper are: (1) most individuals with minimum (and subminimum) wage lifetime average earnings are women, and (2) most of these women have low lifetime average earnings because of fewer years with earnings, rather than low earnings in each year of a 40-year working career.

Keywords: Earnings Patterns, Social Security, Low-wage Workers

JEL Classification: J14, J30, H55

Suggested Citation

Hungerford, Thomas L., Do Workers with Low Lifetime Earnings Really Have Low Earnings Every Year? Implications for Social Security Reform (September 2003). Levy Economics Institute Working Paper No. 389. Available at SSRN: https://ssrn.com/abstract=448820

Thomas L. Hungerford (Contact Author)

National Academy of Social Insurance (NASI) ( email )

1776 Massachusetts Avenue, NW
Suite 615
Washington, DC 20036-1904
United States

Independent ( email )

No Address Available

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